International Journal of Innovation, Creativity and Change. www.ijicc.

net
Volume 8, Issue 6, 2019

Strategic Management Practices in

the Public Sector in Malaysia: Issues
and Challenges
a,b
Wan Mohd Hasif Wan Muhamat Alia, University of Malayab*, Loo-See
Beh, University of Malaya,

This article explains the current practices of strategic management in

the public sector in Malaysia, specifically the federal agencies level
from the lens of its leadership and practitioners. Grounded by a
theoretical framework, lessons learned and experiences of the
informants, the article enlightens real problems and dilemmas behind
the dynamism of the strategic management practices among public
managers. Applying thematic analysis in the research issues such as
capacity and capability of the public managers, inter-division silos,
contrast of audit report and real practice and unprecedented challenges
in public policy and its leadership are recognised among the factors
that contributed to the needs of the new model of strategic
management in the public sector. It recommends to re-conceptualise
the view toward challenges in strategy-making, particularly in
developing an all-inclusive strategic plan for federal agencies or
ministries. It also proposes to synchronise strategic planning, scenario
planning, performance measurement, risk assessment and budgeting
strategies to be integrated more thoroughly as a comprehensive
instructional model in strategy formulation of the agencies. These
elements are suggested to address the highlighted issues of strategic
management practices and public spending in the public sector of
Malaysia.

Key words: Public sector, strategic management, strategic planning, scenario

planning, performance management, budgeting.

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Introduction

The review of the literature concerning the topic of strategic management in Malaysia is still
limited in publication. There were various sectors of management that have been written
regarding strategic management in government-linked companies (GLC) (Samad, 1996),
concepts and principles (Book, 1999), practices in local authority (Yusoff, 2008), practices in
public universities (Abdul Kadir, 2012) and private universities (Bahroom, Latif, & Zarin,
2014), the construction industry (Bakar, Tufail, Yusof, & Virgiyanti, 2011), engineering
contractors (Zakaria & Omar, 2013), public relations in slope development (Tazin & Yaakop,
2015), accounting in Malaysian hospitals (Abdul Rahman, Azhar, Abdul Rahman, & Mohd
Daud, 2012) and in the electrical and electronics industry (Noordin, Zainuddin, Fuad, Mail, &
Sariman, 2015). Literature reviews on the topic of strategic management practice in the
public sector in Malaysia, focus on local authority (Yusoff, 2008), higher education (Abdul
Kadir, 2012), healthcare (Abdul Rahman et al., 2012), small-medium enterprise (Hashim &
Wafa, 2011) and GLC (Samad, 1996). There was a lack of information explaining the
principles, models and practices of Malaysian public sector in general.

An article derived from two prominent scholars, Birger Wernerfelt and Michael Porter,
explains the influence of two main theories in strategic management, namely resource-based
view ( RBV) (Wernerfelt, 1984) and positioning theory (Porter, 1985) in strategy formulation
by public managers in Malaysian public services. While RBV emphasises internal factors
such as human resource, finance and value system, positioning theory explains the needs of
any organisation to position their capacity to achieve competitive advantage (Opata, Sarbah,
Nusenu, & Tetteh, 2017). These two internal and external factors of organisations have been
framed as the most likely method to be used in environmental scanning of the public sector,
especially among federal agencies.

Based on the richness of document analysis and the real experiences from the informants who
are divided into two groups namely top management and middle management, the article will
explore recent issues and practices of strategy formulation, strategy implementation and the
challenges faced by public managers in the execution of their respective strategic planning.
The emergence of another field of management, such as scenario planning, outcome-based
budgeting, performance management and risk management, was risen and suggested by the
informants, which was supported by pieces of literature and have been practiced in most
developed countries. This will be highlighted as part of recommendations for further studies.

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Literature Review
RBV and Positioning Theories in Environmental Analysis

Strategy formulation practices among federal agencies are influenced by a resource-based

view theory (Wernerfelt, 1984) and positioning theory of competitive advantage (Porter,
1985). RBV focuses on specific types of resources inside a firm, such as strategic leadership
and tacit knowledge while Positioning theory explained how firms or organisations can
strategically lead the competition through apparent advantages such as market and product
(Hoskisson & Hitt, 1999).

The RBV and Positioning theoretical influences can be seen through the practice of SWOT
Analysis (Humphfrey, 2005) or TOWS Analysis during the environmental scanning process
in strategy formulation by public managers. Scholars such as Flemming (2014) agreed that
any planning model that an organisation is developing should start with the SWOT analysis.
Generally, SWOT analysis is used to investigate both the interior (strengths and weaknesses)
and their exterior (opportunities and threats) of the firm (Guerras-Martín, Madhok, &
Montoro-Sánchez, 2014). However, Gurel & Tat, (2017) suggest that implementing SWOT
in strategy formulation is not sufficient. Therefore, the effectiveness of SWOT can be
improved by combined new analytical methods qualitatively or quantitatively to get better
dimensions and outcomes of the analysis. This is supported by Helms & Nixon (2010) that
argued SWOT analysis should be combined with other tools such as Porter five forces
analysis and 7S McKinsey’s framework and not used in isolation.

However, strength and weaknesses are usually associated with a specific tool such as 7S
McKinsey to analyse internal issues of an organisation (Gurel & Tat, 2017; Hussey, 1998;
Mcmillan & Overall, 2016). On the other hand, opportunities and threats are associated with
PESTEL Analysis to explore external issues that affected the organisation (Yüksel, 2012).

Environmental Analysis Theoretical Framework

Conceptualised from theories of RBV and positioning, leveraging the practise of SWOT
analysis through the frame of 7S McKinsey analysis and PESTEL analysis, the issues and
barriers in the implementation of strategic management encompass the needs of the
integration of other kinds of sub-management fields such as strategic planning, budgeting,
performance measurement, risk assessment, human resource, change management and
scenario planning. Not to argue any fields of management are more significant than others, or
which theory is supposed to be larger than the other, the idea that most arguments and critics
from works of literature can be seen during the strategy formulation process, where
limitations and problems have risen is inter-related among the internal and external
environmental scanning. Figure 1 illustrates the concept of environmental analysis during the

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strategic management process and the need to address the tool’s weaknesses through the
integration of the sub-management field as proposed. The study of the strategic plan and
interview analysis from the informants discovered a few new elements that will influence the
effectiveness of the strategic management process among public agencies.

Methodology

The study combines two research designs in exploring issues and challenges of practising the
strategic management in the public sector in Malaysia, which are firstly using document
analysis and secondly by in-depth interview analysis. In understanding the norms and
practices by each federal agency, all the 26 documents from federal agencies has been studied
and analysed. Most of the plans were published back in 2016 and before and in the range of 5
years 11th MP plan which is 2016 to 2020.

Figure 1. The concept of environmental scanning during the strategic management process

However, since this study attempts to analyse the practice of the strategy formulation, issues
on the strategic plan’s time frame are not related. The exception is given to Ministry of
Entrepreneurship Development (MED) since it has just re-established back in 2018 after the
historical win of Pakatan Harapan in 14th General Election 2018. MED was formerly known
as MECD during the premiership of Tun Abdullah Ahmad Badawi before 2009.

The federal agencies of Malaysia encompass 5 federal departments and ministries that are
accountable for human resource, finance, economy, management planning and
implementation coordination. As a reflection on its name, these agencies are Public Service
Department (PSD), Ministry of Finance (MOF), Ministry of Economic Affairs (MEA)
(formerly known as Economic Planning Unit or EPU), Malaysian Administrative
Modernisation and Management Planning Unit (MAMPU) and Implementation and
Coordination Unit (ICU). The PSD, MAMPU and ICU are taken into the responsibility of the
Prime Minister Department’s (PMD) administrative, where PMD itself take responsibility as
a centre of administration for fifty-five multi-role agencies under it. Twenty other ministries

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play a different function of the government, as stated in Table 1. The function of each
ministry, federal departments, statutory bodies and government-linked company under the
ministry were established, which helps the minister perform the function based on the
minister act. Examining the content from each plan, the author thoroughly analysed the
elements in the concept of environmental scanning as stated before, as well as the elements of
sub-field of management.

In-depth interviews have been conducted with five informants from federal departments and
ministry, precisely one from MAMPU, two from PSD, one from MOF and one from the
National Institute of Public Administration (INTAN). All of the informants were at the top
and middle management level which is Grade 54, JUSA C and above. The justification of
selection for each agency is because their nature of business is related to the strategic
management process, strategy formulation for budgeting and human resource of the
Malaysian public sector. An exception is INTAN as its focus is on training. Each of them
possesses a directive power in that sense issuing circulars as part of the imperative
mechanism for public service agendas. In this context, strategic management is put under the
purview of MAMPU, budgeting is under MOF and general directive for public service is
under PSD. Using thematic analysis, details of issues and challenges that taken out from the
literature, document analysis and interviews will be articulately presented and elaborated.

Results and Discussion

Strategic Plan Analysis and Expert’s Discourses

Table 1 explains the analysis of each strategic plan in the context of strategic management
practices. Eight (8) elements of management proposed by the discussion above were taken as
guidance in analysing each of the strategic plans.

Vision, Mission and Environmental Analysis

All agencies formulated their vision and mission based on the main government document,
which is the 11th Malaysia Plan (MP). The 11th MP then was revised in 2018 right after the
new leadership of Tun Dr Mahathir Mohamad took the cabinet premiership. This is shown in
Table 1 below:

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Table 1: Analysis of each Malaysia federal and ministries’ strategic plan in the context of
strategic management practices
Elements of Strategic Management
Vision Mission Environmental Strategic Budgeting Scenario Performance Risk
Elements/
Analysis Thrusts/ Planning Measurement Assessment
Ministries/
Objectives/
Departments
Programs/
Activities
PMD General General Internal & Issues- NIL NIL KPI Output NIL
External Based
ERRC
PSD Centralised Core Internal & Issues- NIL Multi- KPI Outcome NIL
Business External Based variable

MOF Centralised Core Internal & Issues- NIL NIL KPI Output NIL
Business External Based
MAMPU Centralised Core Internal & Issues- NIL NIL KPI Output NIL
Business External Based
Relate to
MP
EPU* Centralised Core NIL Core NIL NIL KPI Output NIL
Business Business
ICU Centralised Core Internal & Issues & NIL NIL KPI Output NIL
Business External, Stakeholder
Stakeholder Based
MFT Centralised Core Internal & Issues- NIL NIL KPI Output NIL
Business External Based
Relate to
MP
MOSTI* Centralised Core Internal & Issues- NIL NIL KPI Output NIL
Business External Based

MOH Centralised Core Internal & Issues- NIL NIL KPI Output NIL
Business External Based
Relate to
MP
MUWHLG* Centralised Core Internal & Issues- NIL NIL KPI Outcome NIL
Business External Based
Relate to
MP
MINDEF Centralised Core Internal & Issues- NIL NIL KPI Outcome NIL
Business External Based
MITI Centralised Core Internal & Issues- NIL NIL KPI Output NIL
Business External Based
MOE* Centralised Core Internal & Issues- Cost- Multi- KPI Output NIL
Business External Based Benefit variable
Stakeholder Analysis
MOFA Centralised Core Internal & Issues- NIL NIL KPI Output NIL
Business External Based
MCM Centralised Core Stakeholder Issues- NIL NIL KPI Output NIL
Business Based
NRE* Centralised Core External Issues- NIL NIL KPI Output NIL
Business Based
MOTAC Centralised Core Internal & Issues- NIL NIL KPI Output NIL
Business External Based
MOW Centralised Core Internal & Issues- NIL NIL KPI Output NIL
Business External Based
MRD* Centralised Core NIL Core NIL NIL NIL NIL
Business Business
MPIC* Centralised Core Stakeholder Core NIL NIL KPI Output NIL
Business Business
Relate to
MP
MOA Centralised Core Internal & Issues- NIL NIL KPI Output NIL
Business External Based
MOHR Centralised Core Internal & Issues- NIL NIL KPI Output NIL
Business External Based
MOT Centralised Core NIL Issues- NIL NIL KPI Output NIL
Business Based

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MDTCC* Centralised Core Internal & Issues- NIL NIL KPI Output NIL
Business External Based
MYS Centralised Core External Issues- NIL NIL KPI Outcome NIL
Business Based
MWFCD Centralised Core Internal & Issues- NIL NIL KPI Output NIL
Business External Based
*agency’s official name before 14th general election

Except Prime Minister Department (PMD) which is responsible for general administrative
and management of PMD’s agencies, all ministries and departments adopted their vision and
mission grounded by their core business and the central plan of the government. In the
strategy formulation process, 23 agencies applied an internal environmental scanning mostly
looking at the capacity and capability of their human resources, which is part of the RBV
theoretical foundation. The informant 1, a high-rank officer at PSD argues that the agency
tendencies to analyse their human capital through an internal environmental scanning
reflected the agency’s commitment to preparing the best resources in implementing high
impact strategies for people’s wellbeing. Human resource is just part of the agency’s internal
analysis. The practice of 7S McKinsey assisted public managers to explore what other
internal issues might affect the organisation, informant 1 explained. Seconded to this
argument, informant 4 argued that 7S McKinsey would help public managers to search the
strength and weaknesses of their organisation.

Analysing through an external lens, almost all of the agencies used the PESTEL analysis in
elaborating real issues which encircle the agencies. PMD, in this context, chose to use
Eliminate, Reduce, Raise and Create (ERRC), an environmental analysis tool derived from
Positioning Theory in the Blue Ocean Strategy (Bahroom et al., 2014). Four agencies
implemented stakeholder analysis to support their environmental scanning. Supporting this
phenomenon, informant 1 argued that using PESTEL as well as ERRC as a tool in an external
analysis is much easier for the public manager, in the framework of opportunity and threat in
SWOT analysis. However, the public managers themselves need to understand and know
how to use it correctly. Informant 2 who is a director of planning at PSD, maintained this
argument by stating that it is an everlasting yet usual practice among public managers by
using SWOT, 7S McKinsey and PESTEL in analysing their environmental challenges.
Informant 4, a director of MAMPU, added that public managers need to be very careful in
using these tools because “wrong tools application will yield incorrect results”. Besides
SWOT, Informant 5, who is a top manager at INTAN, proposed to consider ERRC to analyse
competitors and how to compete from ‘red ocean’ market to the ‘blue ocean’ environment.
ERRC itself can be used to understand and analyse the organisational leadership through
what scholars called ‘Blue Ocean Leadership’ (BOL) (INSEAD, 2019), he added.

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Strategic Thrusts / Objectives

Analysis of each agency’s strategic thrusts or strategic objectives revealed that all agencies
formulated their thrusts or objectives based on the agency’s strategic issues. These were
identified in the environmental scanning process. However, only a few agencies aligned their
strategic objectives with the social outcomes as framed in the 11th MP. It is critical that the
agency’s strategies must be strategically aligned with the MP, as what informant 1
emphasised:

“MP is a must document that the agency need to refer when doing strategic planning.
However, due to its nature, MP not covers all core business for each agency
specifically. Therefore, it has a priority area that set up national outcomes for each
operational expenditure and development expenditure. Means that each agency’s
strategic plan will have some part of MP key result areas and the rest will be based
on its core business that also contributes to the national agenda.”

The 11th MP will be the main guidance to each agency in order to formulate their strategies,
spending the funds given and most importantly, to measure the effectiveness of the strategies
and targeted goals. Informant 3, a policymaker and practitioner at MOF, argued that public
managers need to understand the relationship between the vertical and horizontal alignment
of MP. It means they have to know how to relate the lowest level of activities with the
highest level of national outcome horizontally and to relate between operational expenditure
and development expenditure, vertically. Furthermore, he emphasised the nature of MP will
always be consistent in terms of its national outcomes, regardless of any changes of goals
period and re-assessment as what happened after 14th general election. Informant 4
accentuated the critical need of MP in strategy formulation by stressing the MP’s key result
areas should be an essential value when considering programs and activities to avoid any
misconception, overlapping and conflict among agencies. Arguing in the same context,
Informant 5 described the need for agencies to take MP’s essences and to look at the big
picture in building organisation capacity and capability, examining the gap and determining
focus areas to be developed.

Budgeting

Except for MOE which uses cost-benefit analysis in their strategy formulation, all agencies
were not integrated by any budgeting elements in the strategic plan. Recently, the practice of
budgeting in the federal agencies is governed by Outcome-Based Budgeting (OBB) that was
introduced back in 2013 (Asia-Pacific Community of Practice on Managing Development
Results, 2011). The goal of OBB is to address weaknesses of the budgeting system through
integration of planning, budgeting, implementation, monitoring and evaluation at various

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level of organisations. However, to improve this practice, Informant 1 made his point by
questioning the level of acceptance among public managers after six years of its
implementation. To him, there is a considerable gap when public managers could not see the
connection between strategic planning and budgeting processes. The inter-division silos
where strategic planning is put under policy and research division and budgeting lie under
management services division, is the significant factor that contributed to this gap.

Arguing the relationship between strategic planning and budgeting, Informant 1 expressed his
views that the budget must follow strategy. He explained that strategy formulation needs to
be concurrently discussed with budget planning to give better strategic choices. In this sense,
strategy prioritisation plays a vital role in determining desired outcomes of the programs even
within limited resources or budgets. He added that there is a conflict between budget
spending and organisational structure of the agencies. This is due to current practices where
budgets are given based on programs and activities and doesn’t consider the function of each
division under the organisational structure. Hence, in terms of the reporting system, there will
be certain situations where programs and activities under specific division are funded by
budget allocation under different division.

The fact that none of the agencies putting budgeting in their strategy formulation specifically
during strategic plan development echoes the reality voiced out by Informant 1. Informant 2
suggested strategic positioning to be applied based on a situation where the budgeting
element becomes vital to determine strategies and programs that benefit people and the
country. Discussing the acceptance and readiness of public managers, Informant 3 argued that
there is a massive misunderstanding among them where OBB itself brought the connotation
of technical financing methodology, which is different with the spirit of OBB itself that focus
on management. Therefore, top management of agencies tends to let their finance department
deal with it, instead of discussing the budget during the strategy formulation process at a
higher level. Thus, Informant 3 proposed to marry both strategic planning and OBB in one
single document to avoid any conflict of irregularities. Informant 4 views the relationship
between strategic planning and budgeting as “flexible, dynamics and subjective”. He
emphasises that both implementations of strategy and budget should not be tightened by a
mandatory directive but be in a living document that can be adapted through environmental
changes. In another view, informant 5 states there is a need for finance managers to sit
together with other public managers during strategic management workshop of the
organisation. This is important to give an insight and bigger picture about the budgeting
process that involves strategy formulation, strategy implementation, assessing risk,
monitoring performance, managing human resources and considering future scenarios and
various alternative solutions.

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Scenario Planning

Data from the document analysis exposed that only PSD and MOE took initiatives to
consider scenario planning during strategy formulation. While PSD came out with a building
scenario for the future of Malaysian public service in 2020 and beyond (MyForesight, 2015),
MOE listed their future scenarios in the Malaysian Education Development Blueprint for
school (2013 – 2025) and for higher education (2015 – 2025) (MOE, 2013, 2015).
Understanding the importance of environmental analysis in strategy formulation, Informant 1
extended the idea of the need for scenario planning as a tool to develop strategies, as he
argued:

“There is a need to do scenario planning for certain agencies to assist policy

formulation, for example, in economics, trade and education. It is because it will take
a long period to see the outcome of the plan. It takes some years. If you do trading,
you really need to know what are the things to invest. So, scenario planning is critical
for some selected government agencies.”

He expressed his concern that most public managers cannot differentiate scenario planning
with environmental analysis. This will be a caused failure in building a scenario process
where most of the current trends and issues are highlighted. To him, scenario planning is in
‘future tense’ where possibility, plausibility, probability and preferability is analysed to build
the best-case and the worst-case scenarios. Arguing in the same context, he proposed the
importance to determine a robust strategy – the strategy that is applicable in both scenarios –
to be proposed during strategy formulation. However, Informant 2 warned that scenario
planning is not necessarily applicable in all circumstances, especially when it comes to the
budgeting process. This is due to environmental changes that will affect the organisation
priorities. The frequency of changes in the budgeting process itself depends on the
government agenda that currently faces the unprecedented and uncertain world challenges.
Enunciated the same context, Informant 3 cautioned that the scenario building process must
be balanced and measured situations within what the organisational can control and what they
cannot.

Supporting the need for scenario planning in strategy formulation, Informant 4 proposed to
use this tool during strategy thrust and program construction. To him, scenario planning’s
methodologies are exhaustive and very deep in that sense it can assist the organisation in
exploring any possible outcomes, either it could be positive or negative. Hence, the strategies
will be more robust, vigorous and dynamic. While he supported this necessity, Informant 4
also gave his concern about agencies understanding and sufficient knowledge to practice it. It
is because most agencies will do any management practices regulated by the government to
avoid lower rankings in performance management mechanism such as star-rating system

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(MAMPU, 2015) and chief auditor report (Siddiquee, 2012). Thus, the practice is done
because of the regulation instead of the willingness of the agency to improve its management
best practice. Hence, it is imperative to ensure the agencies must be consulted by the
responsible agency first before the practice be implemented at all level of the government.
Spoken in the technical aspect, Informant 5 voiced his point that scenario planning process
requires a high rate level of precision in determining drivers for scenario building. Scenario
driver is a crucial pre-requisite because any fault drivers will be led towards irrelevant
scenarios.

Performance Measurement

As shown in Table 1, all agencies have set up their measurement of key performance
indicators (KPI) – either output level or outcome level – as part of performance management
practice in their organisation. The need for performance management instead of performance
measurement has been discussed by previous scholars such as Poister (2010) who put the
emphasis on outcome. Argued in a similar vein, Höglund, Holmgren Caicedo, Mårtensson, &
Svärdsten (2018), explained that performance management should be more proactive in the
strategic management process, meaning that it should be engaged with specific measures.
Shaw (2016), examined that performance management is disconnected from other elements
of management, which is budgeting. Before that, Okumus (2003) suggested for organisations
to align their performance measures in four perspectives, namely financial, customer, internal
business and learning and growth. Therefore, it is essential to invest in performance
management systems to measure the link between financial inputs with organisational
performance.

Informant 1 insisted that KPI can be used in all-tier of management; be it for the top leader,
middle management or even junior manager. However, he emphasised the significance of the
strategic plan in determining KPI for any programs and activities. It is vital for each agency
to have a living strategic plan to ensure the established KPI will be measured correctly.
Informant 2 created a real question when he stated that preferred KPI and goals of
government agencies are always falsified by real practice report, for example, in the Chief
Auditor Report. What is reported by the Chief Auditor is usually against the excellence of
practice recognised by the rating system mechanism. In a different connotation, Informant 3
highlighted the changes from output-based KPI to outcome-based KPI in performance
measurement. It is aligned with the spirit of OBB that stressed out the needs of each agency
to focus on programs that can directly contribute to the national outcomes. He further
enlightened that the budget endorsement and approval will only be given if each agency can
justify their outcome-based KPI to MOF. Besides that, agencies also are required to present
their trend analysis on budget allocations and expenditures. However, challenges in
expediting this practice arose when the process of knowledge transfer among public

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managers is stuck due to high rate of officer’s transference. Therefore, the newly appointed
managers need to re-start the process again. This situation has forced the government to
enhance an effort to guide the agencies in building their own KPI.

Risk Assessment

No indication of the practice of risk assessment in strategy formulation among federal

agencies is shown in strategic plan analysis. However, risk management practice in the public
sector can be traced through the Prime Minister Order No. 1, the Year 2009 and the
implementation of the Star Rating System by MAMPU. It is stated that risk management is
one of the management practices which will be evaluated in the rating system. Therefore, as
part of the requirement, agencies made an effort to prepare their risk analysis t fulfil this
obligation. Risk analysis in strategy formulation has been discussed by a few scholars.
Hussey (1998) specified sensitivity and risk analysis as an essential approach for the
organisation to deal with uncertainty. In his business model components, he put to risk as an
inherent part of the assessment of the strategy and decision-making process. Supporting this
practice, Wiechmann (2007) proposed that a transparent analysis of empirical facts will
reduce the risk of misconceiving reality in strategy formulation. Hewlett (2011), in another
perspective, suggested the integration of strategic planning, capital budgeting and enterprise
risk management as a model for an effective and efficient business portfolio.

Malaysian public sector is far away from this critical practice, according to Informant 4. This
is due to Informant 3 reasoning as a lack of awareness on risk management and Informant 4
argument that lack of knowledge and skill among public managers. The feelings that
everything is going to be okay, business as usual and only focus on preferable goals, instead
of thinking on probable, possible and plausible futures are among the factors that makes the
needs of this practice to be encouraged and integrated into the strategic management process.
MAMPU, in this context, had come out with a risk management model back in 2012,
according to Informant 4. The model outlines five elements in risk management model in the
Malaysian public sector which are; determine the context, risk assessment, risk mitigation,
monitoring and evaluation and communication and consultation (MAMPU, 2012). The risk
assessment process will offer better insight into the decision-making process before strategies
are agreed by stakeholders. The absence of the risk assessment element in the strategy
formulation process will reduce the meticulousness of strategies, programs and activities that
have been framed in the agency’s strategic plan.

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Conclusion

The practice of strategic management among federal agencies in Malaysia demands a new re-
conceptualised model. Derived from RBV and Positioning theory, the practice of strategic
management in the public sector cannot be demarcated by internal and external
environmental factors of the organisation only, but exigent for other elements of management
such as futures thinking, financial administrative and impact studies. Dominant factors such
as capacity and capabilities of human capital, interactions among organisational system,
performance management mechanism and the competency of an organisation to deal with any
unexpected changes remains a significant challenge that must be encounted by the public
sector. To address these issues, an integrated model of strategic management which
contemplates scenario planning, budgeting, performance management and risk management
is proposed for further study in ensuring the effectiveness and the efficiencies of public sector
organisations. Strategic alignment from each vertical and horizontal axis between strategic
planning and budgeting will close the gap in the implementation of strategic management and
finance.

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Abbreviation of The List of Ministries

Prime Minister Department

Public Service Department
Ministry of Finance
Malaysian Administrative Modernisation and Management Planning Unit
Economic Planning Unit (Ministry of Economic Affairs)
Implementation Coordination Unit
Ministry of Federal Territories
Ministry of Science, Technology and Innovation (Ministry of Energy, Science, Technology,
Environment and Climate Change)
Ministry of Health
Ministry of Urban Wellbeing, Housing and Local Government (Ministry of Housing and
Local Government)
Ministyr of Defence
Ministry of International Trade and Industry
Ministry of Education
Ministry of Foreign Affairs
Ministry of Communication and Multimedia
Ministry of Natural Resources and Environment (Ministry of Water, Land and Natural
Resources)
Ministry of Tourism, Arts and Culture
Ministry of Works
Ministry of Rural Development (Ministry of Rural and Regional Development)
Ministry of Primary Industry and Commodities (Ministry of Primary Industry)
Ministry of Agriculture and Agro-Based Industry
Ministry of Human Resources
Ministry of Transport
Ministry of Domestic Trade, Co-operatives and Consumerism (Ministry of Domestic Trade
and Consumerism)
Ministry of Youth and Sports
Ministry of Women, Family and Community Development

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REFERENCES

Abdul Kadir, N. Z. H. (2012). Strategy Management Process in Higher Education : A Case

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